2015 Income tax

Australian state income taxation: A historical perspective

Source: Australian Tax Forum Journal Article

Published Date: 1 Dec 2015


Contrasting with social insurance taxes and the key revenue raising role of VAT for northern European welfare states, Australia's income tax has funded expansion of Australia's social security system. The uniform income tax plan of 1942 unified Australia's system of income taxes, and was central to funding the introduction of Australia's unique social security system, establishing national child endowment, unemployment benefits and the widows' pension in 1944.

This article will describe the increasing reliance of Australian states on income taxation during the period 1915 to 1942, and the constraints arising from the increasing mobility of taxpayers and post-Federation economic integration; show how these states' income tax policies responded to the economic shocks of the Depression which depleted the states' revenues contemporaneously with increasing demands on governments to provide social protection; and identify how the concepts, design and administration of state income taxes were embedded in Australia's national tax and social security systems established between 1942 and 1944.


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2015 Income tax

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